"For all E&P stocks, this is a bullish call for sure, because price is directly correlated with cash flow," says Luana Siegfried, energy equity research associate at Raymond James, which sees U.S. crude reaching $60/bbl by year-end.

Transocean Partners (NYSE:RIGP) +6.8% AH after Transocean (NYSE:RIG) says it will increase to 1.2 shares from 1.1427 the consideration for its pending acquisition of each RIGP common unit it does not already own.

The move follows the recent failure to receive 50.1% of shareholder votes necessary to approve the RIG-RIGP merger.

The combination of RIG's debt management and cost trends have resulted in a balance sheet that is "looking significantly more robust," although the debt load is still heavy, Canaccord says.

Citigroup keeps shares rated at Neutral, liking the cost improvements that enabled RIG to raise its adjusted EBITDA margin to 52% and gross margin to 55% - the highest levels in years - but noting that offshore demand still looks bleak with an inflection point not yet in sight.

Q3 operating and maintenance expenses fell by more than half from a year ago to $404M, due largely to lower costs associated with stacked rigs and rig retirements, but partly offset by $21M related to the grounding, salvage and preparation for recycling of the Transocean Winner.

Rig utilization was 49%, up from 47% in Q2 but far below the 70% reported in the year-ago quarter..

Transocean (RIG+1.2%) is upgraded to Equal Weight from Underweight with a $12 price target, up from $10, at Morgan Stanley, which says cost-control efforts continue to bear fruit, prompting positive EBITDA accretion of $600M in 2016 alone and an improved liquidity position as a result.

Oil States (OIS+0.2%) also earns a Stanley upgrade, to Overweight from Equal Weight with a $53 price target, up from $40, predicting a meaningful recovery in offshore production equipment orders over the coming quarters coinciding with improved onshore related earnings; thus the firm sees OIS reversing its underperformance relative to its North American pure play peers.

However, the firm also downgrades Atwood Oceanics (ATW-1.4%) to Equal Weight from Overweight on valuation.

"No news is still good news" at Transocean (RIG-0.4%), Citi's Scott Gruber writes after the company issues its latest fleet status update, highlighting the previously announced contract on the Transocean Barents and easily termination on the Discover India, a new contract on the Sedco 712, and tweaks to other contracts.

"News that isn't negative can be considered positive at this stage in the cycle," according to Gruber, given RIG's improved EBITDA generation (~$100M added vs. prior estimates), several contract extensions that saved rigs from stacking earlier in Q3, and the likely scrapping of three more midwater floaters.

Transocean's (RIG+0.3%) 17K-ton oil drilling rig that ran aground off the Scottish coast more than two months has finally departed its anchorage en route to Malta.

The Transocean Winner rig ran aground at Dalmore Bay on the Isle of Lewis in a storm in early August while being towed to Malta, was refloated after three weeks and anchored at Broad Bay before being put on board a heavy lift ship ship used for transporting large maritime structures over long distances.

Turkish authorities had to provide the documentation that will allow the drilling rig to eventually be taken to a yard in Turkey where it will be scrapped.

Investigations found two of the rig's four fuel tanks were damaged in the incident, but most of the fuel that was spilled likely has evaporated with no damage to the environment.

Transocean (RIG-3.4%) is upgraded to Sector Outperform from Sector Perform with a $14 price target, raised from $12, at Scotia Howard Weil, but shares nevertheless extend yesterday's sharp loss after Reliance Industries terminated its deal for the Discover India drillship four years early.

In its upgrade, Weil says that after spending time with management its thesis on the stock remains that RIG provides the best trade in a deepwater recovery; given the recent updates on the global oil macro environment along with some company specific catalysts, the firm thinks it is time to get involved in the stock.

Transocean (RIG-7.3%) is sharply lower after news that Reliance Industries exercised an option to terminate its contract for the Discover India ultra-deepwater drillship more than offsets the impact of a new 15-month contract with Suncor for work off the Canadian coast starting next year.

RIG will receive a $160M lump sum fee because of the cancellation, effective in December, or slightly more than four years before the January 2021 end date called for in the original contract; the dayrate had been set at $508K.

Reliance had exercised a contract for the drillship from September 2013 until September 2016 in the Gulf of Mexico at a $528K dayrate.

Transocean (NYSE:RIG) -0.6% AH after Carl Icahn cuts his stake in the company to 1.5% from 5.88%, according to an SEC filing.

Icahn says CEO Jeremy Thigpen and RIG management "have done an outstanding job given the challenging environment," but he reduced his position to recognize a capital loss for tax planning purposes, the same reason he offered last week in cutting his stake in Chesapeake Energy.

Icahn now owns ~5.48M shares, vs. ~21.48M held at the end of the June quarter.

Transocean (RIG+1.6%) is higher after Canaccord Genuity upgrades shares to Hold from Sell with a $9 price target, although the firm continues to view offshore drillers in a negative light as the industry faces acute overcapacity.

In the current landscape, Canaccord says RIG stands out as one of the best funded companies in the sector, with an asset base that has been adequately invested with some recent acquisitions, and a "rock solid" balance sheet.

"Given our long-standing negative view on the sector, we look for opportunities in offshore drilling that are value- and sentiment-driven," the firm writes, seeing RIG's current share price as a "realistic assessment of its position."